IBM to Freeze $48B Pension Plan in 2008

Well, all I can say is this is the reason I work for myself and no one else. Apparently IBM is the latest in a growing list of companies that are short changing their employees. Quoted from the Associated Press:

"BOSTON - Furthering corporate America's move away from pensions, International Business Machines Corp. said Thursday it will freeze its $48 billion pension plan in 2008 and instead enhance its 401(k) benefits for its 125,000 U.S. workers.

Nearly all IBM's U.S. employees — everyone hired before Jan. 1, 2005 — have pension benefits accruing under a traditional annuity-like plan or a cash-balance plan, which gives workers interest-bearing funds that they can take with them if they leave the company."

It looks like the rich guys are working harder than ever to destroy the middle class. Start your business people, start your own business. Don't rely on a transnational corporation who puts profits first.

The pension is much better than the 401k. Who does IBM think they're fooling?

 

Well at least they are still planning on paying those benefits. I'm surprised more companies haven't been involved with an enron-type scandal over the last several years.

Any idea what the projected difference in value is?

 

Well, the article didn't give any info as to the difference in projected value between the 401k and pension for the employees, but it did mention the amount IBM would save by 2010. Quoted from the Associated Press:

"IBM executives said that by no longer having to account for pension accruals that would have mounted after 2008, the Armonk, N.Y.-based technology giant will save between $450 million and $500 million this year alone and up to $3 billion from 2006 through 2010.

However, the change will result in a $270 million charge in the just-completed fourth quarter of 2005."

It seems IBM was also hit with a billion dollar lawsuit by its employees over age discrimination.